Did Satyam Computer Services promoter B Ramalinga Raju make a calculated move in owning up to a Rs 7,800 crore fraud to lessen the degree of punishment? With media reports speculating that Raju may have had benami accounts, land holdings and so on, senior government sources told Outlook Business that the suspicion from day one has been that Raju probably owned up to inflating accounts as the punishment for this is significantly less than that for siphoning funds.

"If Raju had been charged with more serious offences such as siphoning of funds or forging of valuable securities, then under Section 467 of the Indian Penal Code he would have faced life imprisonment. These offences are also cognisable and non-bailable," says Aman Sinha, Senior Counsel, Supreme Court. On the other hand, if he is charged with cheating, say under Section 420, then the maximum punishment is seven years, with the likelihood of getting away with a shorter term. The provisions under the Income Tax (I-T) Act and the like also dont provide that extreme punishments either. For instance, under Section 277A, an offence for falsification of books or accounts, etc. carries a maximum punishment of rigorous imprisonment of three years and with a fine (though some other I-T offences could carry even a maximum of seven years).

With the scam seemingly having multiple layers, the truth will be out only after investigations have been completed and appropriate charges filed. Meanwhile in New Delhi, within the corridors of government, hardly anyone is buying the theory that Raju, at present in judicial custody till January 23, only inflated accounts to show inflated profits for the past several years. Rather, with the sudden remembrance of the Income Tax Department having unearthed more than 50 bank accounts in the name of Raju's family members and others way back in 2002, the focus now is on whether the profits were actually siphoned away to group companies such as Maytas Infrastructure for investments in the latters infrastructure projects. Or worse still, for underhand deals to grease the hands of politicians and bureaucrats. "Maytas in the last few years has bagged a number of high-profile infrastructure projects and it is a well known fact that the Rajus were politically well-connected. There is more than what meets the eye," says a government source.

It may be noted that in September 2008, Delhi Metro Rail Corporation (DMRC) managing director E Sreedharan made a controversial remark about the Hyderabad metro project, for which he was a consultant. In a letter to the Planning Commission Deputy Chairman, Montek Singh Ahluwalia, Sreedharan said that making, "available 296 acres of prime land to a BOT (build, operate, transfer) developer for commercial exploitation was like selling the family silver." He further said that the land concession could lead to a "big political scandal some time later."

There is also widespread scepticism about Rajus claims that Satyams profits margins could have been as low as 3%. "It is highly possible that just as businessmen rotate funds, Raju must have also done the same by siphoning funds from Satyam to Maytas, especially with the real estate market booming and with the latter grabbing many government projects including the Hyderabad Metro project," says a business analyst who didnt want to be named. Rotation of funds refers to the practice of illegally moving funds from, say, Business A and investing it in Business B. Once the investment in Business B turns profitable, the original money is quietly put back in Business A.

With the IT sector being given tax waiver (recently extended till March 31, 2010), many IT companies have been flush with funds. "It is likely that Satyam siphoned away its monies to Maytas hoping to make a killing on the projects, assuming the boom in the economy continued.However, the US sub-prime crisis and the subsequent market meltdown burst the realty bubble, shattering Rajus original plans," suggests another business analyst.

Disappointed by the failure of the auditors in either not spotting or allowing the scam to take place, home minister P Chidambaram, on January 12, is said to have summoned Ved Jain, President of The Institute of Chartered Accountants of India (ICAI), and told him in no uncertain terms that the chartered accountants regulator should take proper cognisance of the role of the auditors and take appropriate stringent actions thereafter. Soon after, ICAI initiated stringent proceedings against PricewaterhouseCoopers, Satyams auditors. While sources would not confirm or deny whether PwC would be banned from conducting business in India if found guilty, they indicated that the government was in no mood to be lenient to anybody found guilty. "Many a time, finance ministry officials do point out to ICAI about auditors who cook books, but the apex body only looks the other way," alleges a government official.

Though Chidambaram took over the reigns of the Home Ministry after the Mumbai terror attack, for all practical purpose he continues to be the de jure finance minister. "The PM has had huge faith in the administrative capabilities of Mr Chidambaram," says a source the finance ministry portfolio now comes directly under the Prime Minister.